Gold’s upward trajectory has slowed as investors focus on potential interest rate changes in 2025.
Gold traded within a tight range on Wednesday as market participants weighed the likelihood of a slower pace of Federal Reserve interest rate cuts next year.
Chair of the Federal Reserve Jerome Powell emphasized the need to ease inflationary pressures further earlier this month. This has led to a reduction in the anticipated number of rate cuts for 2025.
Investors are also digesting recent data showing unexpectedly low U.S. consumer confidence amid uncertainties surrounding the policies of a potential future Trump administration.
Pranav Mer, an analyst at JM Financial Services Ltd. in Mumbai, observed that gold showed stability during the brief holiday trading period. Yet, the dollar’s strength continues to exert pressure on the market.
Typically, lower borrowing costs positively impact gold prices, as the precious metal does not offer interest payments.
Gold has set consecutive record highs this year and is projected to end 2024 with gains exceeding 25%.
U.S. monetary easing, safe-haven demand, and central bank purchases had driven prices upward. However, the recent dollar rally following Donald Trump’s election victory has tempered the gold surge.
A stronger dollar makes dollar-denominated commodities more expensive for most buyers.
The Bloomberg Dollar Spot Index remained relatively stable after climbing 0.3% in the previous session.
Gold prices dipped 0.4%, approaching $2,612 per ounce. Palladium and platinum saw gains, while silver prices retreated.
Most Commented